China and the World of Business • China Business and the World

“Power not socialism is today’s Chinese ideology,” by Richard McGregor, The Financial Times, July 25, 2006

Going back through the archives (going on vacation with the family can be murder on your reading,) I picked up an article written by Richard McGregor in the FT on July 25 in which he cogently argues that China is about power, not about socialism.

By itself, that’s no stunning revelation – if anything China’s cadres, bureaucrats, and even soldiers seem daily to give greater credence to the belief that you needn’t scratch any Chinese very hard to find a capitalist. Richard’s suggestion is the suggestion that ideology in China is (cynically) little more than a convenient fig leaf to protect those in power is, similarly, an acknowledged truism.

Government v. Business?

But what really tickled my frontal lobes was his use of the recent rejection of the draft property law as an example of the kinds of decisions made to keep the party in power as opposed to keeping the economy moving forward.

The issue Richard really wants us to understand is this: the increasingly powerful economic forces in China, represented by Big Money (the global financial establishment, including the mandarins at the People’s Bank in China) and Big Enterprise (the leaders of the reformed SOEs and medium-large local and foreign companies whose success is driving the economy,) are not the constituency to whom the Party and the government play.

As befitting a publication like the FT, McGregor portrays this as a growing conflict between single-party rule and growing private interests in the PRC. That’s one way to look at it, certainly, especially if (as McGregor does) you reject the idea that any Marxist concepts have pervaded the thinking of the Party.

Power of the Pitchforks

I don’t see it in the same way. I think the point is that the implicit forces driving decision making in Beijing remain a concern for the perceptions of those who wield the latent power to end the Party’s rule – the workers, farmers, cadres, bureaucrats, taxi drivers and shopkeepers who make up what we all affectionately know as the lao bai xing.

And they should be afraid. Take a nation where popular upheaval to is a time-honored means of governmental transition, and add in an incomplete economic development process with mind-boggling and growing inequality, and things start to look very touchy indeed.

Strong, stable, pluralist societies are built on a foundation of ubiquitous property ownership – when your life is invested in an asset you cannot move, you have a pretty powerful compulsion to safeguard the system that assures its value.

But when you have a society in transition, where there remain tens of millions of people in abject poverty with little to lose in following mystics and demagogues, even the appearance of playing to Big Money and Big Enterprise is a dangerous proposition.

This is not about the Party vs. The Money. This is about recognizing that an ironic way, the power of China’s leaders actually does come from the people. Business and finance interests will have limited say in China until such a time as nearly everyone in the PRC is vested in the success of the system.

For Big Money and Big Enterprise in China – and for any group borne of commercial concerns – this means that when your agenda operates in opposition to the improvement of the lot of the Chinese people, your agenda has no hope, and that the best way to get your way in China is to make improving the lives of “the masses” an implicit part of what you do here.